Why do corporations want to keep the price of their stock high? ...

[evelyn o bentley]

Why do corporations want to keep the price of their stock high?
 
  A) Corporations can pay their managers lower salaries and avoid principal-agent problems when stock prices are higher.
  B) A higher stock price increases the funds the firm can raise when it sells a given amount of stock.
  C) Higher stock prices are correlated with lower expected profitability.
  D) All of the above provide incentive for corporations to keep the price of their stock high.

Question 2

An increase in liabilities will reduce a firm's net worth.
 
  Indicate whether the statement is true or false

Question 3

What is the difference between explicit and implicit costs?
 
  What will be an ideal response?

Question 4

When groups of mortgages are bundled together by financial institutions and sold to investors, these institutions are said to be ________ mortgage loans.
 
  A) liquidating B) underwriting C) securitizing D) harvesting

Question 5

How is accounting profit calculated?
 
  What will be an ideal response?

[DylanD1323]

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[evelyn o bentley]

Correct answers!

[DylanD1323]

Great! Please up vote